Lucent technologies, the telecoms equipment maker, said yesterday it would shed 20 jobs at its Dublin operations after announcing its ninth straight quarterly net loss. The US firm posted a $7.91 billion (€7.97 billion) loss and said it would have to cut another 7,000 jobs because the telecom spending slowdown had not relented.
A Lucent Ireland spokeswoman confirmed the firm would make 20 Irish staff redundant, bringing staff numbers here to about 800. Over the past two years the telecoms firm has shed 60,000 jobs, reducing its workforce to 45,000.
Lucent's third-quarter results included a non-cash charge of $5.83 billion, or $1.70 per share, due to an accounting rule related to the company's net deferred tax assets at June 30th. Deferred tax assets, such as those resulting from net operating losses, reduce taxable income in future years.
"A charge of $5.8 billion is absolutely staggering, regardless of why it's being taken and that it's a non-cash charge," telecom industry analyst Mr Tom Lauria said. "There's no reason to believe right now from these results that the \ industry has stabilised," he added.
Lucent's stock fell 20 per cent, or 42 cents, to $1.68 by late morning on the New York Stock Exchange.
The job cuts have resulted in an additional business restructuring charge of $808 million, which was recorded in the third fiscal quarter, the company said. These charges are expected to result in about $700 million annual savings.
Lucent declined to provide any guidance for the fourth quarter, citing the market's uncertainty, but repeated its goal to return to profitability in late fiscal 2003.
"We thought we were bouncing along the bottom. . . [but\] predicting stability in this environment is a challenge," Lucent chief executive Ms Patricia Russo said.
"Obviously this market has been deteriorating almost quarter by quarter," she added. "This is like an endurance test of orders of magnitude."
Ms Russo also pointed to the company's smaller loss before one-time items, as well as its improved gross profit margin of 23.5 per cent, up from 22.8 per cent in the previous quarter, and a positive operating cash flow of $739 million, including a $616 million tax refund.
Lucent said its latest restructuring actions would allow it to break even with quarterly revenue of $3.5 billion and post a gross profit margin in the low 30 per cent range.
(Additional reporting Reuters)
